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The Impact of Public Scrutiny on Corporate Philanthropy

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  • Ailian Gan

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Abstract

This paper proposes that a corporation’s vulnerability to public scrutiny drives its corporate giving. The hypothesis that companies donate for strategic motives is tested against the alternative that they do so for altruistic reasons. Court cases and news articles were selected as proxies for public scrutiny. Macroeconomic variables were used to gauge the level of public charitable need and test for altruism. Through examining the philanthropic behavior of 40 Fortune 500 companies over 7 years, this paper finds that companies are strategic and altruistic in their giving. Copyright Springer 2006

Suggested Citation

  • Ailian Gan, 2006. "The Impact of Public Scrutiny on Corporate Philanthropy," Journal of Business Ethics, Springer, vol. 69(3), pages 217-236, December.
  • Handle: RePEc:kap:jbuset:v:69:y:2006:i:3:p:217-236
    DOI: 10.1007/s10551-006-9087-4
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    References listed on IDEAS

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    1. Harbaugh, William T., 1998. "What do donations buy?: A model of philanthropy based on prestige and warm glow," Journal of Public Economics, Elsevier, vol. 67(2), pages 269-284, February.
    2. Bernheim, B Douglas & Shleifer, Andrei & Summers, Lawrence H, 1986. "The Strategic Bequest Motive," Journal of Labor Economics, University of Chicago Press, vol. 4(3), pages 151-182, July.
    3. repec:cup:apsrev:v:94:y:2000:i:04:p:891-903_22 is not listed on IDEAS
    4. Duncan, Brian, 2004. "A theory of impact philanthropy," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2159-2180, August.
    5. Mike Adams, 1998. "An Analysis of Corporate Donations: United Kingdom Evidence," Journal of Management Studies, Wiley Blackwell, vol. 35(5), pages 641-654, September.
    6. Stephen Brammer & Andrew Millington, 2004. "The Development of Corporate Charitable Contributions in the UK: A Stakeholder Analysis," Journal of Management Studies, Wiley Blackwell, vol. 41(8), pages 1411-1434, December.
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    Citations

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    Cited by:

    1. Ming Jia & Zhe Zhang, 2014. "Donating Money to Get Money: The Role of Corporate Philanthropy in Stakeholder Reactions to IPOs," Journal of Management Studies, Wiley Blackwell, vol. 51(7), pages 1118-1152, November.
    2. Daina Mazutis, 2014. "Supererogation: Beyond Positive Deviance and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 119(4), pages 517-528, February.
    3. Blanca de-Miguel-Molina & Vicente Chirivella-González & Beatriz García-Ortega, 2016. "Corporate philanthropy and community involvement. Analysing companies from France, Germany, the Netherlands and Spain," Quality & Quantity: International Journal of Methodology, Springer, vol. 50(6), pages 2741-2766, November.
    4. Hela Sheth & Kathy Babiak, 2010. "Beyond the Game: Perceptions and Practices of Corporate Social Responsibility in the Professional Sport Industry," Journal of Business Ethics, Springer, vol. 91(3), pages 433-450, February.
    5. Cheng-Li Huang & Ju-Lan Tsai, 2015. "Managerial Morality and Philanthropic Decision-Making: A Test of an Agency Model," Journal of Business Ethics, Springer, vol. 132(4), pages 795-811, December.
    6. Kellie Liket & Ana Simaens, 2015. "Battling the Devolution in the Research on Corporate Philanthropy," Journal of Business Ethics, Springer, vol. 126(2), pages 285-308, January.
    7. Marcus Wagner, 2013. "‘Green’ Human Resource Benefits: Do they Matter as Determinants of Environmental Management System Implementation?," Journal of Business Ethics, Springer, vol. 114(3), pages 443-456, May.
    8. De Lucia, Caterina & Bartlett, Mark, 2014. "Implementing a biofuel economy in the EU: Lessons from the SUSTOIL project and future perspectives for next generation biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 22-30.
    9. Ming Jia & Li Tong & P. V. Viswanath & Zhe Zhang, 2016. "Word Power: The Impact of Negative Media Coverage on Disciplining Corporate Pollution," Journal of Business Ethics, Springer, vol. 138(3), pages 437-458, October.
    10. Arthur Gautier & Anne-Claire Pache, 2015. "Research on Corporate Philanthropy: A Review and Assessment," Journal of Business Ethics, Springer, vol. 126(3), pages 343-369, February.
    11. Sun Lee & Craig Carroll, 2011. "The Emergence, Variation, and Evolution of Corporate Social Responsibility in the Public Sphere, 1980–2004: The Exposure of Firms to Public Debate," Journal of Business Ethics, Springer, vol. 104(1), pages 115-131, November.
    12. Lydia Segal & Mark Lehrer, 2013. "The Conflict of Ethos and Ethics: A Sociological Theory of Business People’s Ethical Values," Journal of Business Ethics, Springer, vol. 114(3), pages 513-528, May.

    More about this item

    Keywords

    altruism; corporate giving; corporate philanthropy; strategic philanthropy; D64; G34;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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